3 months ago
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Centrifuge platform intends to provide fast liquidity through lending to the RWA market on the secure Base network.
In a bid to further scale the adoption of institutional decentralized financial (DeFi) space, Centrifuge (CFG), an established decentralized asset financing protocol, has announced the launch of a lending market in close partnership with several web3 projects. According to the announcement, the newly launched lending market by Centrifuge protocol will rely on collateral assets from several United States Treasury-backed tokens with the help of Morpho protocol’s system of vaults.
The entire lending market by Centrifuge protocol was designed and developed on the Base network, an Ethereum (ETH) centered layer two scaling solution backed by Coinbase Global Inc (NASDAQ: COIN). Institutional investors seeking fast liquidity on their selected collaterals can gain access to Circle’s USDC without having to worry about banks and liquidation fees.
The selected collateral assets that will be available on the newly launched lending market include Anemoy Liquid, Treasury Fund (LTF), MidasShort Term US Treasuries (mTBILL), and Hashnote’s US Yield Coin (USYC).
“This RWA market with Morpho aims to give these tokens utility. If you hold a Treasury bill and you need a bit of USDC for a couple of hours, or days, or whatever, you can have that access without having to go through the complicated process of redeeming it, waiting for the issuers to give you the dollars back and possibly pay fees. So, basically instant liquidity without having to actually redeem the underlying asset that you’re using to borrow,” Lucas Vogelsang, co-founder of Centrifuge protocol, noted.
Centrifuge Protocol and RWA Adoption
Earlier this year, Centrifuge Protocol announced that it had secured $15 million in a series A funding round co-led by ParaFi Capital and Greenfield. The company highlighted that its focus is to tap on DeFi technology to onboard institutional investors into the web3 space in a compliant and safe way.
By closely working with the Base network, which has seen a significant rise in daily active users on the Ethereum ecosystem. Centrifuge is assured of sustainable future growth prospects.
According to the latest market data, the RWA space has grown to more than $6.9 billion in market cap and an average daily traded volume of about $464 million.
Market Impact
Over the years since its launch in 2017, Centrifuge has provided liquidity to investors in the form of CFG tokens. As a result, CFG has grown to a small-cap altcoin, with a fully diluted valuation of about $211 million and a daily average traded volume of about $717k.
Amid the ongoing crypto rebound following the August 5 market crash, CFG price has risen over 14 percent in the last week to trade at about 38 cents at the time of this writing.
The launch of the new lending market by the Centrifuge Protocol will significantly increase the adoption of CFG tokens. Furthermore, institutional investors seeking to lend and borrow their assets on blockchain gas seamlessly tap into the Centrifuge lending market.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
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